In recognition of the importance of agriculture as the backbone of the country’s economy, providing financial support to farmers was a priority immediately after independence. For this reason, the Agriculture Finance Corporation (AFC) became one of the first government institutions in the newly independent country.
Since 1963, the AFC has assisted more than 70,000 farmers in Kenya and up to 1.5 million clients. Besides, it has overseen more than 100 Corporate Social Responsibility (CSR). This institution which has branches across the country focuses solely on financing agricultural-related ventures. If you have been looking for an agricultural loan in Kenya, AFC can be a good place to start.
Below are some of the loan products that the Agriculture Finance Corporation provide to farmers in Kenya.
Agribusiness Loan
Agribusiness traders in Kenya can apply for this loan to get funds to start or finance their existing agricultural microenterprises. It is ideal for youth engaged in various enterprises across the agricultural value chain. However, an individual or group can qualify if they meet the requirements. You can apply for this loan product if you are a trader, transporter, marketer, or processor of farm produce. If you successfully get the loan, you have up to three years to pay it at an interest rate of 10% per annum.
Below are the requirements to get an agribusiness loan in Kenya from the AFC:
- Your agricultural enterprise should be viable
- You should have a tangible security for the loan
- You need to contribute 20% equity towards the project
Machinery Loan
Machinery loan product aims to assist farmers seeking to purchase farm equipment to help in the production and transport of their produce. It could be farming machinery and equipment crucial for livestock or crop production. Besides, it could be a truck to help transport your harvested produce. You can apply for this loan as an individual or a group. Machinery loan is repayable for 2-5 years with annual installments.
Here´s what you need to qualify for a machinery loan:
- You should identify the machinery that will have a joint registration with AFC.
- Obtain a written quotation from a reputable machinery supplier
- The machinery should have comprehensive insurance cover
- If you are purchasing reconditioned machinery, AFC requires you to give a minimum deposit of 50% of the net purchase price. For new machinery, you need to give a minimum deposit of 30%.
Seasonal Crop Credit
Farmers producing crops that mature within a year can apply for seasonal crop credit. These crops include maize, potatoes, rice, and wheat. The loan product aims to help the farmers purchase inputs such as seeds, agrochemicals, and fertilizers or fund land preparation and harvesting. You can apply for seasonal crop credit as a group or an individual. If you qualify for the loan, you have a repayment period of up to 12 months.
AFC requires you to meet the following requirements to get this credit:
- Produce a suitable crop
- Have tangible collateral for the loan
- If you produce maize and wheat, you should have an acreage of five acres for the crop
Livestock and Fisheries Development
If you operate a livestock or fisheries enterprise, you can apply for this loan product to uplift your venture. It could be dairy and beef production, sheep and goat production, fish production, poultry and piggery production, and beekeeping.
Here is what you need to qualify for this type of loan:
- The project should be viable or suitable
- You should have a tangible security for the loan
- You should be experienced in the specific enterprise
Cash Crop Loan
Farmers producing cash crops such as coffee, tea, citrus, Sugarcane, pyrethrum, cashew nuts, mango, bananas, and stevia can apply for this loan product. You can use the agricultural loan to purchase processing equipment, finance crop establishment or maintenance, or cover operating costs. The loan is available to individuals or groups. The repayment period is 2-5 years with annual installments.
AFC requires you to meet the following requirements to qualify for this loan product:
- Be engaged in the right and approved crop variety
- Have tangible collateral for the loan
- Be near a processing facility for your crop
Schools Based Loan
AFC recognizes the role of educational institutions in producing food for their needs. Therefore, it has a special credit product to primary, secondary, and tertiary institutions aiming for self-sufficiency. Schools can use the loan for horticulture production, farm machinery and infrastructure, crops and livestock production, value addition, and agribusiness. The loan has affordable interest rates. Your institution should pay the loan within 1-5 years. Here is what a school needs to obtain the loan:
- Submit a proposal for the intended project
- Have adequate land to carry out the project
- Open a Vuna relationship account with the AFC
Horticulture and Floriculture Development Loan
If you are engaged in a horticulture or floriculture project in Kenya, this loan product will suit your financial needs. You can apply for a loan to fund fruit, flower, and vegetable production, and purchase or installation of greenhouse, water, and electricity supply systems. Besides, the loan can be used to purchase harvesting and packaging equipment. AFC also allows using the loan as working capital or funding operation and labor costs. The loan is available to individuals and groups. If you qualify for this loan product, you will need to repay it in 2-3 years in annual installments.
Below are the requirements to get a horticulture and floriculture development loan in Kenya from the AFC:
- You should have relevant experience in horticulture and floriculture
- You should have an adequate water supply
- You should comply with the regulatory requirements
Water and Development Loan
Water supply may limit farmers who wish to venture into agricultural activities. This development loan provides funds to develop water infrastructure for irrigation and livestock use. You can use the credit to buy irrigation equipment, dig boreholes and shallow wells, buy or build farm tanks, or cater for the transport and labor costs related to installations. You can qualify for the water development loan if you meet the following requirements:
- Be near a suitable water catchment
- Have tangible collateral for the loan
- Have a water permit from the relevant authorities
- If you are digging a borehole, you will need to have a water test certification highlighting the quality and quantity of the water
The Agricultural Finance Corporation is a government institution aiming to provide credit for agriculture development purposes. Therefore, any individual or group involved in any activity within the agricultural value chain can find a loan product suitable for their specific enterprise.